New York City is in the midst of a fiscal crisis, with a precariously balanced budget, future budget gaps, and significant risks that tax revenue and State aid may be lower than projected and that deserved federal aid may not be forthcoming. Still, New York City should not borrow now in order to balance the fiscal year 2021 budget.

Borrowing now as a substitute for already budgeted savings would prop up unaffordable spending and provide illusory stability while diminishing the imperative to properly manage the City’s finances. It also would obligate future New Yorkers to pay for current services, constrain future budgets’ ability to fund services needed, and hamper New York’s competitiveness. At this time, City leaders should make additional hard choices that balance the needs of current and future New Yorkers—taking care of our most vulnerable, providing core services, and keeping New York competitive as a place to live and start and grow businesses.

Borrowing should be a last resort, and could be a reasonable choice if revenues prove significantly lower than currently projected. Therefore, borrowing should be authorized only under the following strict conditions:

1. The City implements all savings included in this year’s adopted budget and identifies and implements an equal or greater amount of savings in future years;
2. The amount authorized is limited to what is needed to address additional revenue shortfalls in the near term that are not supported by new federal aid;
3. Borrowing is part of a comprehensive and feasible multiyear plan that leads to fiscal stability, as certified by the Financial Control Board (FCB) or that meets criteria defined in law;
4. A control period is established during which the FCB is required to approve and empowered to condition each instance of borrowing, closely monitor the City’s fiscal management, and approve or reject City actions that have major fiscal impacts; and the control period continues until the FCB determines that recurring spending can be supported with recurring revenues or the City meets pre-determined benchmarks if established in law.